284 Bruce to Curtin

Cablegram 113 LONDON, 14 September 1944, 6.36 p.m.

TOP SECRET

Your 110 of 15th August. [1]

I took up with Chancellor of the Exchequer point you raised therein and have now received the following reply.

Begins- The defence project for which material is required will, we anticipate, be continued indefinitely after termination of the war and maintenance of the supply of uranium will therefore continue to be of significance to His Majesty's Government in the United Kingdom.

For this reason I must ask for option to purchase the material produced to last for a minimum period irrespective of length of war and in return I am prepared to agree that the cost of the development work up to A45,000 should be borne entirely by His Majesty's Government in the United Kingdom. On this basis it would seem equitable that the United Kingdom should have an option to purchase all uranium oxide produced during first five years after commencement of production. His Majesty's Government in the United Kingdom would be prepared to pay a price which would reimburse Commonwealth Government fully for cost of production including a reasonable allowance for overheads and allowing for the proceeds of any byproducts. The form in which the material should be made available to the United Kingdom could, of course, be settled later.

We should expect further that at end of the period of five years (assuming that we have [materially] [2] exercised our option to purchase) your Government would discuss with us possibility of renewing option for some further period on the same terms. You will be aware that in asking your Government to undertake development of this source urgently we have been concerned solely with defence needs and in suggesting terms outlined above I have been assuming that there will be no question of use of the material for any other purpose. If, however, material acquired by us in accordance with this arrangement should be put to some use other than the military and strategic purposes which we have in mind it would be reasonable to re-open the price terms so that Commonwealth Government might participate in any benefits of non- military exploitation. When I opened this subject with Mr. Curtin

falling into undesirable hands and this remains and will, after the war, remain a primary concern. Although, therefore, I am prepared to agree on above lines to some limitation of the United Kingdom's option to acquire material I must ask your Government to undertake that whether or not material is being acquired by His Majesty's Government in accordance with any such arrangements Commonwealth Government would not allow any material to pass otherwise out of their effective control without prior consultation with His Majesty's Government in the United Kingdom.

In view of possible critical importance of this material to future peace of world I must urge necessity for such an undertaking irrespective of any arrangements which may be made from time to time for actual purchase by us. Ends.

BRUCE

[AA:A3195, 1944, INWARDS MOST SECRET MASTER SHEETS, FROM BRUCE, 1.33220/19/18]

1 On file AA:A461, C373/1/4, ii. Curtin had advised that the Commonwealth Govt felt that U.K. options on Australian uranium production should be limited to the period of active hostilities.

2 Word in square brackets has been corrected from Bruce's copy on file AA:M100, September 1944.

3 See Document 154.

[3] I stressed to him importance of preventing this material from